The process of genetic transposition has revolutionized ideas about evolution and the formation of chromosomes in eukaryotes and prokaryotes alike. While the genetic impact of transposons is becoming evident, the enzymes that splice genes and the regulatory mechanisms controlling their expression and activity in the cell are unknown. Only a few systems are currently available which permit genetic and biochemical analysis of these problems. Our long range objective is to dissect the biochemical mechanisms that regulate Mu transcription and replication. Phage Mu uses transposition to integrate and replicate its DNA. It is the most active natural transposable element known: during the lytic cycle Mu uses the E. coli replication machinery to transpose to 100 sites in the chromosome within an hour. The principle elements controlling virus development are located near the left genetic end. We are developing a technology based on anti-sense RNA production that allows the characterization of phage transcription patterns in vitro as well as in vivo. Mu utilizes converging promoters to synthesixe either lytic functions or Mu repressor. This operator is interactive wiht host enzymes. Supercoiling stimulates lytic transcription and decreases repressor transcription; thus, the virus is sensitive to DNA gyrase activity of the host. A binding site for a type II DNA binding protein of E. coli (IHF) is located in the promoter near a DDNA site containing a sequence induced bend. IHF enhances supercoil-modulation of promoter strength in vitro. This type of enhancer controls 50-fold regulation. Mu transposition is efficient also because a set of accessory proteins is encoded by a dispensible region of the virus. One protein from this region, an unusual DNA binding protein encoded by the Mu gam gene, has been purified in large amounts. pgam blocks exonucleases and aggregates supercoiled DNA. In vitro and in vivo experiments are outlined to define the biochemical mechanisms by which this protein modifies the Mu transposition process.